Associations see foreclosures, renters as pressing issues

What's on the minds of community association residents these days? Foreclosures, renters, secretive boards and sloppy managers are high on a long list.

That's what they told the Illinois Condominium Advisory Council at a recent public hearing in Naperville.

The council has been assigned the task of identifying major challenges to associations and making recommendations for legislative change to the General Assembly. Made up of lawmakers and association veterans, the council is conducting a series of public hearings around the state before preparing its report by year's end.

"We are seeking input from the public and agencies and individuals as to their concerns and issues to assist us in our ultimate deliberations," the council's chairman, attorney Jordan Shifrin of Kovitz Shifrin Nesbit in Buffalo Grove and Chicago told the two dozen or so attendees.

Sharing several concerns was Hugh Hamill, president of an Elk Grove Village association of 1,100 single-family homes, townhomes and condominiums. He first addressed the matter of lost assessment income when units are foreclosed, an increasingly common scenario these days.

"The banks are able to recover a good part of their losses," he said. "They have protections, but the associations are left holding the bag. The burden falls to the remaining homeowners, many of whom are struggling themselves, and often in the form of special assessments."

Hamill also wants to see stronger regulation of property managers. He offered two suggestions: mandate manager licensing and create a means to file complaints about managers who behave improperly.

Thirdly, Hamill would like to see legislation that permits boards to conduct business via e-mail, which current law does not.

Dawn Lennon, who lives in a 93-unit condominium association in Arlington Heights, also questioned the loose environment in which property managers operate. She expressed concern about possible conflicts of interest when managers hire contractors for the associations they represent and the lack of professional oversight.

"There are no checks and balances, or requirements to follow," she said. "Management companies have to be held liable for the things they do."

Unlike Hamill, Lennon is against e-mailed business transactions. Boards are too secretive the way it is, and e-mail is one more way they can hide their actions from the owners, she said.

For Robert Wahlgren, executive director of the Community Housing Association of DuPage, the growing number of rental bans and the speed with which they take effect is a pressing issue. The bans reduce the number of units available for the agency's affordable housing programs.

Wahlgren said he is not opposed to leasing prohibitions, but that he is advocating for longer transition periods for owners who bought their units when leasing was permitted. Possible compromises include grandfather clauses, exceptions for nonprofit organizations, and caps on the number of units that can be rented at one time.

Council member Rep. Harry Osterman (D-Chicago) asked Wahlgren if he had noticed any trend in associations becoming more liberal with leasing as a reaction to increased foreclosures.

Wahlgren said he had not. If anything, leasing restrictions are gaining momentum, in part because some people believe their property values will go up if renters are banned.

Transparency is the hot button for Marianne Bates Barg, who lives in a Woodridge association of 123 single-family homes and townhouses. She opposes closed meetings, including executive workshops or training sessions or other board gatherings.

"There needs to be clarification of what is a meeting, and don't use semantics," she said. "We pay those assessments. We should be allowed at workshops. What are they hiding?"

Barg also wants standards established for properly executed meeting minutes and for those minutes to be easily accessible to the owners -- not stashed in a manager's office far away. She said she understands that mailing copies of the minutes to every owner every month could be expensive, but why not mail them to owners who ask or put them online or in an email?

For information about future public hearings or to share your concerns or complaints about community associations in Illinois, e-mail Jordan Shifrin at jshifrin@ksnlaw.com.